The Hindu : Kerala / Thiruvananthapuram News : No new taxes planned, says Finance Minister

Online edition of India's National Newspaper
Sunday, Dec 04, 2005

Kerala

Kerala - Thiruvananthapuram

No new taxes planned, says Finance Minister

Special Correspondent

He says tax collection will be improved

THIRUVANANTHAPURAM: The Government does not intend to introduce new taxes to mobilise revenue to meet the additional commitments in the State's Rs.6,210-crore annual plan for 2006-'07, according to Finance Minister Vakkom B. Purushothaman.

Speaking to presspersons on the sidelines of a seminar on Value Added Tax (VAT) organised by the Centre for Taxation Studies here on Saturday, he said the revenue to meet the 15 per cent increase in the Plan outlay would instead be met by improving tax collection, among other things.

Earlier, addressing the seminar, the Finance Minister said tax earnings had dropped by seven per cent after the introduction of VAT up to October. However, a 19 per cent increase in the share of taxes from non-VAT products had helped to offset this shortfall. The drop was expected and the Centre would compensate it. He said the problems dogging VAT, including that of evasion, could only be overcome through full-scale computerisation of the collection system. The Government would not hesitate to spend the Rs.15 crores required for this since it would bring in revenue through better collection.

Mr. Purushothaman said traders were generally complying with VAT, but a lot of confusion remained after the changeover from the Sales Tax system. The trading community had not fully realised the benefits of the new system under which they fix and pay their own taxes. The Government was ready to organise more awareness programmes to rectify this problem, he added.

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